Sony’s Entertaining New Future?

(A version of this article appeared in the January 16, 2006 issue of Jon Peddie’s TechWatch)

Sony and Sony’s Chairman and CEO, Sir Howard Stringer, took the stage at CES 2006 to announce Sony’s new focus on being an entertainment company on all fronts. Stringer’s presentation served as the opening keynote for the show, and was preceded by an introduction by Gary Shapiro, president and CEO of the Consumer Electronics Association (CEA). The CEA is the entity which puts on CES each year.

Gary Shapiro, President & CEO, Consumer Electronics Association

Shapiro’s message was mostly political in nature, underscored by his bringing forth Nevada’s U.S. senator, John Ensign. Both Shapiro and the senator had strong messages about not restricting the consumer electronics market nor consumer’s access to content and information. There was a subtle irony in these messages preceding Sony’s keynote, as Sony is a major proponent of DRM – witness the recent Sony BMG root kit DRM fiasco as a prime example.

Stringer’s opening message addressed the Sony BMG copy protection problem only in passing, suggesting that it was not Sony’s intent to punish consumers, but merely protect content and the rights of artists (a number of whom came out in recent months asking not to be protected in the fashion that Sony had chosen, incidentally). I had the sense from Stringer’s comments that it appears Sony was more upset that it was caught, rather than remorseful that they had done something they should not have. It probably did not help that Stringer read everything off of one or more of around a half dozen teleprompters scattered about the stage and above the audience’s heads, as that made his performance rather stiff and stuffy.

Sony’s new mission, under the title “Entertaining the Future”, was the theme for the remainder of Stringer’s keynote, leveraging the brand that is Sony, based on four pillars, which Stringer dubbed e-Entertainment, Digital Cinema, High-er Definition, and PlayStation.

Sir Howard explained that the “e” in “e-Entertainment” stood not only for “electronic”, but also for “everyone”, in the sense that everyone can create, distribute, consume, and communicate, and thus e-Entertainment was personal entertainment, and in the context of Sony’s new mission this meant “recognizing and accommodating the needs of the individual, providing choice and convenience in all of the ways consumers use products.” Lofty goals, but as Stringer indicated no desire to diminish Sony’s DRM efforts, it appears that the choice and convenience provided are limited to what Sony wants to or is willing to provide.

Stringer paraded forth the new Sony Ericsson W810 Walkman phone as one example of e-Entertainment – it features a 2 megapixel camera, EDGE network data access, quad-band support, an MP3 player, and, oh yes, a phone. For some reason I can’t fathom, the audience was then subjected to a short portion of a Franz Ferdinand song played off the W810 via the sound system to demonstrate the sound quality of the new phone. I’m not sure I can tell the difference of music playback by a Sony Ericsson Walkman versus a $25 MP3 player from Taiwan or even a $399 iPod these days, but I could tell that it was a source of pride to Sony that their phone’s music playback sounded the way it did.

Also featured under the e-Entertainment banner was the slim Sony Cybershot T9 camera, which really is a nice piece of hardware (the media got to check out all of the things Stringer discussed at a media preview the night before), featuring image stabilization and better low light imaging. And there was the Sony HDR-HC1 HD camcorder too.

But the real star of Stringer’s e-Entertainment was the Sony Reader, a device not much larger than an oversized paperback book, which uses digital paper to allow people to read electronic books. The Sony Reader will ship by the end of March at a price of $299 to $399, and users will be able to view 7500 pages on a single battery charge. Internal memory will store up to a hundred books, with removable MemoryStick and SD storage adding hundreds more books and images which can be accessed at will. Initially, e-books will be available from Sony’s CONNECT store, price yet to be determined. Web content and blogs will also be downloadable to the Sony Reader.

Stringer brought out famed author Dan Brown, whose “The Da Vinci Code” would be among the first e-books available for the Sony Reader. Brown lauded the benefit of the Sony Reader to researchers, students, and travelers alike, although he did profess to still wanting to read real books in the comfort of his own home. One interesting point Brown did make was that devices like the Sony Reader would allow publishers to take risks on lesser known authors because the investment in e-book content was minimal compared to having to prepare a print run (see related blog entry).

The e-Entertainment discussion concluded with a demonstration of Sony’s LocationFree technology, where a Sony PSP on stage was used to view television (and change channels) in New York City as well as in Tokyo.

The next “pillar” Stringer covered was that of Digital Cinema, represented by Sony’s 4K digital projection system, based on SXRD high definition technology. For star support of Sony’s efforts in this venue, Stringer first brought out director Ron Howard and producer Brian Glazer, responsible for the forthcoming cinematic adaptation of “The Da Vinci Code”. They also read from teleprompters, but did reward the audience’s patience with a short clip from the movie, starring Tom Hanks. The clip was projected with the Sony SXRD projector, of course.

The highlight of the keynote, however, was when Tom Hanks himself joined Stringer, Howard, and Glazer, and did not read from the teleprompter, although he initially made believe that he did: “It’s a pleasure to be here with you today, Howard, to be able to deliver these heartfelt comments off of one of your new extraordinary Sony SXRD high-definition teleprompters.” Hanks continued to adlib and improvise, much to Stringer’s discomfort and closed by saying that Stringer should know that actors would do anything if money were involved – even doing podcasts. Stringer did not know how to respond to that.

It’s not clear that having these stars on stage really helped Stringer get his point across that Sony’s Digital Cinema initiative will be revolutionary for movie theaters, however. But it was entertaining, and entertainment is what the new Sony is all about.

For “High-er Definition” Stringer trotted out sportscaster Greg Gumbel who sang the praises (courtesy of the teleprompter) of HD television broadcast for sports. The discussion moved over to HD programming from CBS and Sky TV, and then into Blu-Ray. Stringer explained why he felt Blu-Ray was the wave of the future in HD media technologies, and why a number of major studios including Sony Pictures, were supporting Blu-Ray. He also indicated that Sony was first to announce Blu-Ray support last year at E3 with the unveiling of the PlayStation 3.

Interestingly, at this point Stringer brought out Michael Dell as a supporter of Blu-Ray. Dell is a major competitor to Sony’s PC product line, arguably the main competitor, and according to Michael Dell, Dell has approximately 40% of the U.S. flat panel display market too. After Dell’s sales pitch for his company’s wares, Stringer closed by saying “if you want a really expensive laptop, buy a VAIO”. Stringer’s comment fell with a thud, as you might expect. Perhaps it was a planned answer to a comment from Dell that Dell didn’t make, but Stringer stuck with the telepompter script. Not exactly the sort of sales pitch I think Sony should be making (even though I agree, especially as an owner of several Sony VAIO laptops).

Michael Dell with Sir Howard Stringer

The last pillar of Sony’s new mission was “PlayStation”, and Stringer brought in Kaz Hirai, president and CEO of Sony Computer Entertainmnet America, to do clean-up. Sadly, Kaz had nothing new to share about the PS3. No dates, prices, or anything else that had not already been said elsewhere.

Sony’s keynote was really more of a sales pitch for Sony’s products, under the thinly veiled guise of refocusing on Entertainment as the core mission for the company. The only real interesting technological development in which Sony was differentiating itself from countless competitors was the Sony Reader. Other e-book systems exist, but none so far with the capabilities and ergonomics of the Sony Reader. Most of the other products discussed were ones Sony had already been shipping for a short while, or ho-hum upgrades to older products.

Sony does have an incredibly well known and well respected brand, and it would be foolish for them to not leverage as much out of the inherent goodwill the Sony name has as they can. And certainly, as both a content provider and a technology company, they have the potential at combining the best of both worlds. But, because of that Sony is also between a rock and a hard place with respect to DRM. On one hand, as a content provider, they feel they need to lead the DRM charge (even if the results are a catastrophic PR mess), while on the technology side, DRM stifles their innovative potential. Case in point is the the VAIO XL1 Digital Living System, which is limited to a physical 200 DVD media changer instead of the ability to rip and store however many DVDs the user has hard disk space for in the device.

In any event, in order to maintain its perceived role as a technology leader, Sony needs to continue to truly innovate, and do so in a very public fashion. However, having Sir Howard Stringer as their pitchman is not the way for Sony to get its message across to a broad audience. To paraphrase Tom Hanks, Sir Howard might be better off back in his Knighthood Club where all the “Sirs” get together to order pizzas and talk about the Queen and let someone more dynamic be the front man for Sony.